Peter Mandelson 'returns to Government in Gordon Brown's reshuffle'

Peter Mandelson is to be brought back to the Government as Business Secretary
under a reshuffle by Gordon Brown, it has been reported.

Mr Mandelson remains a controversial figure in the Labour party after twice being forced to leave the Government under Mr BlairPhoto: AFP/GETTY

By Jon Swaine and Andrew Porter

9:54AM BST 03 Oct 2008

He will replace John Hutton at the department.

Mr Mandelson, who is currently Britain’s Trade Commissioner at the European Union, was an architect of New Labour but fell out with Mr Brown after backing Tony Blair for the party leadership in 1994.

It is thought he contributed to the speech given by Mr Brown to the Labour conference in Manchester last week

Mr Mandelson remains a controversial figure in the Labour party after twice being forced to leave the Government under Mr Blair.

He quit as Trade Secretary in December 1998 after it emerged that he had failed to declare an interest-free loan from Geoffrey Robinson, a millionaire Labour MP whose business dealings were being investigated by his department.

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In January 2001 he was sacked as Northern Ireland Secretary by Mr Blair after it was suggested he had put pressure on a Home Office minister to give British citizenship to Srichand Hinduja, an Indian businessman who had sponsored the Millennium Dome.

The futures of several Cabinet ministers were thought to have been in the balance as Mr Brown considered a wider than expected shake-up of his top team.

It had been predicted he could keep the reshuffle very limited and just announce a replacement for Ruth Kelly, the out-going Transport Secretary.

However, Mr Brown is considering wider changes which could see new Cabinet ministers with responsibility for energy and food.

But Mr Brown could yet put off the major changes until after the New Year, sources close to the Prime Minister said last night.

Behind closed doors in Whitehall several ministers were fighting to hold onto their jobs. They included Mr Hutton and Hilary Benn, the Environment Secretary.

Mr Brown is keen to promote Liam Byrne, the Immigration Minister, to a “Cabinet enforcer” role. That would then see Ed Miliband, the Cabinet Office Secretary, move across Whitehall to take charge of Mr Benn’s Department of Environment, Food and Rural Affairs.

Labour MPs were also last night speculating that there could be change in the Whips Office. Geoff Hoon, the Chief Whip, is interested in having control of a department and could be shifted to take over from Miss Kelly at Transport.

Mr Hoon has never lost a vote for Mr Brown during his year in charge, but Nick Brown, an old ally of Mr Brown and former Chief Whip under Mr Blair, could return to the role. That would annoy some MPs who fear that Nick Brown would instil more fear and uncertainty among Labour MPs.

Another junior minister who could be promoted to a senior role closer to Prime Minister’s Number 10 operation is Baroness Vadera. She worked closely with Mr Brown when he was at the Treasury and has retained a key status since he became Prime Minister, despite being given a role serving under Mr Hutton at the Department for Business, Enterprise, and Regulatory Reform.

Jon Cruddas, the popular backbench MP, could be given a role in the Government despite turning down a position last year when Mr Brown first came in.